The deal announced Friday to buy Sky Italia and 57 per cent of Sky Deutschland is valued at 5.35 billion pounds ($9.1 billion). BSkyB's largest shareholder is Rupert Murdoch, who holds just over 39 per cent of the company.
Murdoch is also chairman and chief executive of 21st Century Fox, which has a strong presence in cable, broadcast, film, pay TV and other fields. The cash from the sale of some of its pay TV assets in Europe is expected to help fund the company's pursuit of Time Warner after the recent failure of an $80 billion offer.
James Murdoch, Rupert's son and co-chief operating officer of 21st Century Fox, said the combination of European Sky companies would create "enormous benefits for the combined business and for our shareholders." He also said the organizational structure would be simplified and service to customers would improve.
BSkyB said the deal would create a multinational pay TV provider with 20 million customers and unite pay TV businesses in three of Europe's four biggest markets.
The company said 21st Century Fox would receive cash payments of 4.9 billion pounds and that BSkyB would also transfer its 21 per cent stake in the National Geographic Channel.
BSkyB said it was paying 2.45 billion pounds for Sky Italia and 2.9 billion pounds for its stake in Sky Deutschland.
The company said it would make a voluntary cash offer to Sky Deutschland's minority shareholders at 6.75 euros ($9) per share.